U.S. energy companies reduced the active oil and natural gas rigs for the fifth consecutive week, as reported by Baker Hughes in their recent report on Friday.
For the week ending August 11, the rig count, a preliminary gauge of future production, dropped by five, totalling 654 rigs. This count hasn’t been this low since March 2022.
This week marks the 14th instance in the past 15 weeks where there was a decrease in rig operations. Compared to the same period last year, there’s a decline of 109 rigs, equivalent to a 14% drop, as stated by Baker Hughes.
The count for oil rigs remained constant at 525 after eight weeks of decline, whereas gas rigs decreased by five, reaching 123, a number last seen in February 2022.
U.S. oil futures have been on an upward trend, witnessing growth for seven consecutive weeks and marking a 3.1% increase this year, following a 7% rise in 2022. On the other hand, U.S. gas futures have seen a sharp drop of about 40% this year, even after a 20% surge last year.
Forecasts by the U.S. Energy Information Administration (EIA) in August suggest U.S. crude production could grow from 11.9 million bpd in 2022 to 12.8 million bpd in 2023 and further to 13.1 million bpd in 2024.
Despite the slump in gas prices, the EIA’s projections indicate that U.S. gas output is set to increase from a record 98.13 billion cubic feet per day in 2022 to 103 bcfd in 2023 and to 104.1 bcfd by 2024
